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36 I Southeast Europe bne December 2017
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benefits from in office gyms and saunas to subsidised housing for their workers in order to attract and keep good people. As it becomes harder to find workers
in Bucharest and Romania’s second city Cluj, tech firms are looking further afield to second-tier university towns like Iasi, Brasov and Craiova.
Bridging the innovation gap
Ronner-Grubacic referred to the importance of innovation for economic development and stressed that “the knowledge and tech gap in some sectors of the Romanian economy needs to be bridged, the problem with skilled labour needs to be fixed. If not, investors will move elsewhere.”
“If Romania is going to become an innovation driven economy, the only constraint it has is human capital,” added Dragos Pislaru, Romania’s former labour minister, now a partner at think tank Civitta Romania. Pislaru singled out issues such as Romania being the last in Europe in terms of lifelong learn- ing, with just 3.3% of the workforce currently receiving training as one of the limiting factors.
Romania still has a raft of positive attributes, including the country’s strong economic growth rate. The government’s forecasting body, the
in the fight against corruption, the emergence of high value added sectors, and Romania’s demonstrated resilience to recent external shocks such as the Greek debt crisis and the war in neighbouring Ukraine.
Add this to the frequently touted benefits of Southeast Europe’s largest market – at over 17mn, Romania’s population is more than twice as large as those of the region’s next largest countries Bulgaria and Serbia – and natural resources from oil and gas to abundant farmland, and in many ways there is a compelling investment case if the issues of policy predictability and labour availability can be overcome.
Romania also shines in comparison to its northern neighbours when it comes to its relationship with the EU. Unlike most of the Visegrad Four countries whose governments are increasingly in conflict with Brussels, Romania is firmly com- mitted to deeper EU integration, which Bucharest hopes will culminate in entry to the eurozone.
“We are in a region that is not among the best in Europe,” Oana Popescu, director of the GlobalFocus Center think tank, put it, citing the way CEE member states have started to distance themselves from Brussels and pursue their own interests.
“Romania’s population is more than twice as large as those of the region’s next largest countries”
CNP, has just lifted its forecast for this year to 6.1%. Admittedly, this is mainly consumption driven growth on the back of fiscal easing and wage increases, as pointed out by the European Commis- sion in its Spring Forecast earlier this year, while “investment, by contrast, contracted as public investment fell”.
Other positives noted by the head of the European Bank for Reconstruction and Development (EBRD) office in Romania, Matteo Patrone, include the progress
“Romania by comparison seems like
the angel in this region, an advantage we haven’t had before. Germany and other member states have not previously shown a lot of interest [in Romania]
but they are interested now.”
Still, for Romania to attract increased investment, Bucharest must make a concerted effort to bring about political stability and policy predictability to prevent international investors taking their money elsewhere.
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